BURNABY, BC, Aug. 29 /CNW/ - Photon Control Inc. ("Photon") (TSX-V: PHO),
a leading developer of photonic sensors, releases its unaudited financial
results for the second quarter ended June 30, 2007.
Sales for Q2 2007 were $1.4 million. Sales for the comparable period in
Q2 2006 were $1.5 million and for Q1 2007 $1.8 million. Although this
represented a decrease compared to Q2 2006 of 9%, sales for the first six
months of 2007 are $3.2 million, 13% higher than the comparable period in
2006. This lower revenue for Q2 2007 primarily was as a result of the slower
than expected start of sales of the 'Original Equipment Manufacturer' ("OEM")
product lines to the Company's 'Fortune 500' customer in the semiconductor
capital equipment sector.
Gross Margin for Q2 2007 amounted to 37% as compared to 47% for Q2 2006.
This reduction of 21% was in part due to the increase in the Canadian dollar
exchange rate relative to the US dollar as approximately 95% of the Company's
sales are in US currency, to higher premises expenses as this increases the
fixed manufacturing expense on margins of reduced sales, and the start of
sales in the latter half of 2006 of new sensor systems which realize lower
margins until higher production volume is achieved.
The Net Loss for Q2 2007 was $1.0 million compared to a Net Loss of
$1.2 million in Q2 2006, a decrease of 15%. Contributing to this improvement
in operating results was a decrease of $0.5 million in operating expenses
attributable to the restructuring undertaken by the Company in the latter half
of 2006 to reduce product development expenses.
A previous guidance was provided in the Management Discussion and
Analysis issued with the Q1 2007 Financials, which revised estimated 2007
sales to $9.1 million. Based on the results for Q2 2007, which were below
expectations, management believes that estimated annual sales for 2007 will
approximate $7.0 million.
Photon's financial results and MD&A are available at www.sedar.com and
will be posted on Photon's website.
Factors and Assumptions
The sales estimates for 2007 have been prepared based on the following
factors and assumptions:
- Reliability of purchase requirements of specific customers for
deliveries of existing Photon products and new products requested;
- Continued status of Photon as an approved and in some cases favoured
supplier of quality sensors and systems;
- Replication of historical full sales cycle experience from initial
customer inquiry to commencement of volume sales, by product type;
- Reliability of future purchase requirements of current and
prospective customers as communicated to Photon;
- Customer expectations for business trends for the balance of 2007 are
- That Photon will have sufficient funding to maintain satisfactory
working capital to perform its supply commitments for the balance of
- The Company will successfully complete new product development along
the timelines expected.
This News Release contains forward-looking statements about Photon
Control Inc. (the "Company") and its business. Forward-looking statements are
statements that are not historical facts and are generally, but not always,
identified by the words "expects," "anticipates," "believes," "intends,"
"estimates," "projects" and similar expressions, or that events or conditions
"will," "may," "could" or "should" occur.
The forward-looking statements in this News Release are subject to
various risks, uncertainties and other factors that could cause the Company's
actual results or achievements to differ materially from those expressed in or
implied by forward-looking statements. These risks, uncertainties and other
factors include, without limitation, uncertainty as to the Company's ability
to successfully complete new product development along the timelines expected;
the Company's need for funds to achieve its goals and uncertainties as to the
availability and cost of funding; uncertainty as to the continued and future
demand for the Company's products; the Company's present reliance on one major
customer for about 70% of its sales; the Company's reliance on the financial
health of the semiconductor industry for 95% of its sales, and continued
financial health of that industry; the accuracy and reliability of the factors
and assumptions of the Company listed above; the development of competing
technologies and the possibility of increased competition; the effect of slow
growth in the Canadian, United States and international economies generally
and other economic trends and conditions in the markets that the Company and
its customers serve; the effect of the risks associated with technical
difficulties or delays in product introductions, improvements, implementation,
product development, product pricing or other initiatives of the Company and
its competitors; factors that may result in a reduction in capital
expenditures and/or delayed buying decisions affecting demand for the
Company's products; currency fluctuations, the possibility that the Company
will pursue additional development projects or other business opportunities.
Forward-looking statements are based on the beliefs, opinions and
expectations of the Company's management at the time they are made, and the
Company does not assume any obligation to update its forward-looking
statements if those beliefs, opinions or expectations, or other circumstances,
should change. Readers should not place undue reliance on forward-looking
statements. Precautionary statements made herein should be read as being
applicable to all related forward-looking statements wherever they appear in
this News Release.
About Photon Control Inc. www.photon-control.com
Photon Control Inc. develops products that use light (photons) for
measurement and control, including the inherent advantages of light over
electricity. Photon's products offer improvements in cost, performance and
safety. Photon manufactures its controls and sensors for the semiconductor
industry as well as for life sciences and hazardous environments. Photon is
currently developing a range of optical meters and analyzers for industry.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the contents herein.
For further information:
For further information: Company Contact: Lauren Nickel, Investor
Relations, (604) 422-8861 x 108, email@example.com